In the following document I explore my thoughts on the implementation of the Opportunity to Purchase Act(OPA) in East Palo Alto (EPA). I broke my analysis into two parts, my initial opinion following review of the documents and public meetings associated with OPA, and my opinion following a numeric analysis of Housing in EPA.
Upon my initial exploration of EPA OPA, I found myself very in favor of the ordinance. A new strategy municipalities can use in efforts towards social and racial equity alongside gentrification and displacement seemed holistically beneficial. In my analysis, I saw concerns of creating difficulties for landlords, realtors, and people selling homes largely focused on difficulties of selling homes on a longer time scale which would be created by the offering process. There was also some concerns of loopholes and the ordinance not actually helping low-income community members, though I did not understand the full basis of this concern. It seemed most of the concerned parties were individuals who did not necessarily live in the community like landlords and realtors (who in my opinion should have less influence due to their lower stake) and the single-family owner-occupied households who had been falsely rallied in the first two parties’ cause. I found this particularly frustrating because the opposition created a narrative that this would likely affect all single-family homeowners, when in reality owner-occupied single-family residences were automatically excluded from the ordinance, so long as they had not been vacant for more than 6 months and owner occupied for the past year.
This rallying of single-family property owners to what I felt was a largely false cause led me to targeting my analysis on single-family properties, as I thought this was the largest audience who could realistically be swayed by evidence. I do not believe the core stakeholders of each side (landlords, realtors v non-profits) could not be swayed as their difference of opinion is one of morals and values, juxtaposing community equity and reducing gentrification and displacement against monetary capitalistic gains of an individual. I do believe that if shown the encroachment and loss of property over time, some of the owner-occupied single-family opposition may be swayed, in hopes of preserving their community and reducing displacement through OPA.
To begin to establish an understanding of the situation, I performed a parcel analysis in which I evaluated tenure and change-of-hands trends for single-family properties in EPA. In order to identify these properties, I relied on zoning data, focusing on low density residential housing. Further to identify owner-occupied (OO) as opposed to renter-occupied (RO), I noted any tax exemptions, using exemptions of $5600 and $7000 to identify OO and exemptions of $0 to identify RO. It is important to note these assumptions as they are not necessarily perfect but will give a fair estimate. An initial plot of OO and RO properties demonstrates a fairly homogeneous spread of the two together, as can be seen bellow for the fiscal year 2018/2019. This does not inherently influence my opinion but was informative to see.
Following this I performed a general tenure trend analysis over the four fiscal years which were represented in the data, which can be seen below. I was surprised to see that more properties were RO than OO and that this gap was appearing to only grow over the years, increasing by 6% over the four fiscal years which can be seen by hovering over the lines on the plot. This finding drove me more in support of OPA as a safeguard against gentrification and displacement which I feel is demonstrated by the increase in rented property.
The next analysis I took interest in was a change of hands analysis. Clearly more properties were transforming from OO to RO from the above plot, but I was interested in a more thorough break down of these fluctuations and changes in property ownership. Seen below is two plots, the first looking at a count of change-of-hand transaction and the second looking at the trend of percentages.
My key take-aways from the above plot is that most transactions are within RO properties, but still these transactions only pertain to less than 10% of rental properties. This largely dissuades some of my concern regarding depleting the total rental property pool, as a small fraction of the properties is ever up for sale and not all properties will be purchased by OPA potential buyers. Additionally, I think it is very interesting that the percentage trends indicate an increase in properties changing hands between OO and RO as opposed to staying constant. Ultimately, in consideration of influencing peoples’ opinion on OPA, I think it is most noteworthy in driving home that renter occupied properties are a good target for the ordinance as they change hands the most.
The final analysis I considered was a housing burden analysis. This analysis was performed for the whole of EPA and I have included plots representing three levels of housing burden below, 30%, 40%, and 50%.
These plots were the evidence which most significantly undermines my opinion. In the plots most brackets do have renters as more housing burdened, but in all three plots, the two lowest income brackets show home owners as consistently more severely housing burdened. This causes some concern for me as the goal of OPA is to help low-income groups gain wealth, but as the lowest income groups are housing burdened when owning property, this opportunity for ownership may not in fact help, but drive them into further housing burden,
Ultimately, from my analyses, my two key take-aways are that owner occupied properties are decreasing and homeownership causes more burden in the lowest income tiers. These key points cause some dissonance in my opinions on the implementation of OPA. On one hand, I see it as an opportunity to drive up the amount owner-occupied units in EPA and in giving more families the opportunity to own land, also give them the opportunity to accrue wealth. On the other hand, seeing that the lowest income brackets have owner-occupied homes facing more rent burden, I would be concerned that OPA may increase this population of low-income owner-occupied homes facing rent burden. In the end, I do feel OPA would be a beneficial ordinance to implement for EPA.